BUSINESS HELPDESK A WINDOW OF HELP DESK
OPPORTUNITY ON ENERGY?
Marc Wheatley of Full Power Utilities, providers of BMF Energy Plus, looks at the options available.
THE LAST 12 months have been unprecedented in the UK energy markets, with record- high wholesale prices, extreme market volatility and large-scale Government intervention (more on that later), but the landscape continues to be incredibly confusing for consumers. Trying to time your entry to the energy market to secure your next supply contract(s) has never been more important. Whilst we cannot predict future market movements with complete certainty, the team behind BMF Energy Plus believe a window of opportunity has opened.
Following record high energy prices in August and September, prices have fallen throughout October (*see attached graphs). This is a result of UK gas stores having reached near-capacity in recent weeks – meaning the risk of the UK running out over the winter period has diminished, due to the mild weather we have been experiencing so far this Autumn.
As we move into winter, however, these gas stores will start to deplete as the nights draw in, temperatures drop, and owing to the continued shutdown of the Nord Stream 1 pipeline, the UK will not be
able to refill its gas stores at the same rate they will fall. As gas stores start to fall, wholesale gas prices will likely start to increase again.
Despite end user gas and electricity prices remaining incredibly high, we are now seeing prices up to 40% lower than they were just a few weeks ago. We believe this represents a small window of opportunity, especially for those consumers that are soon to come out of a fixed rate contract or those already on an ‘out of contract’ tariff.
UK Government’s Energy Bill Relief Scheme for Non- Domestic Consumers There has been further clarification in recent weeks as to what support is available for UK businesses and their energy bills. While the Government has tried to target their support more effectively, the matter remains confusing to many, so we have tried to simplify it below: ¡ Support is available to all non- domestic organisations that are on a fixed price supply contract agreed on or after 1st December 2021, or are on a ‘deemed’/’out of contract’/’variable’ tariff , or are on a flexible purchase contract. ¡ Support will apply to any gas and electricity consumed between 1st October 2022 and 31st March 2023. ¡ The support is coming in the form of a discount on the wholesale element of the gas and electricity consumed during this time.
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¡ We can’t confirm exactly what this discount will be for individual consumers, as the discount is calculated against the Government’s published wholesale energy prices on the day you secure/secured your contract. ¡ The discount provided will be limited for those on a deemed/ out of contract/variable tariff. ¡ The Government has also announced they will conduct a review in December to determine if the support period should be extended beyond 31st March 2023.
What should business owners/decision makers do? ¡ For consumers currently in a fixed contract that covers the period from 1st October 2022 – 31st March 2023 there is nothing to do, as the discount (if applicable) will be applied automatically. ¡ Consumers that are currently on a deemed/out of contract/variable tariff should look to agree a fixed contract ASAP to fully benefit from the support. ¡ Consumers whose existing fixed rate contract ends between 1st October 2022 – 31st March 2023 will need to agree a new fixed contract to start immediately after their existing contract ends to fully benefit from the support. BMJ
If you would like some advice, contact the BMF Energy Plus team via the following link -https:// www.fullpowerutilities. com/partners/bmf
www.buildersmerchantsjournal.net November 2022
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